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"Far more serious" allegations, says Key, as Collins resigns

"Far more serious" allegations, says Key, as Collins resigns

By Pattrick Smellie

Aug. 30 (BusinessDesk) - Prime Minister John Key has been handed a cast-iron excuse to rid his government of its troublesome Justice Minister, Judith Collins, using an email supplied anonymously to his office yesterday which appears to show Collins conspiring with the Whaleoil blog run by National Party activist Cameron Slater to unseat the then head of the Serious Fraud Office, Adam Feeley, in 2011.

Collins was the Minister responsible for the SFO at the time and in the MOctober 5 2011 email, Slater says he has "spoken at length" to Collins, who he claims "is gunning for Feeley" and was keen to know anything of his background that she could pass on to the State Services Commission.

Such actions would breach of the State Sector Act, which governs the employment relationship between a departmental chief executive and their Minister

"In my view, this is a far more serious matter than anything else I have seen," said Key, who has baulked twice at sacking Collins twice this year, first over her association with Oravida, a Chinese dairy products company where her husband is a director, and most recently for her role in hounding a public servant through the Whaleoil blog in 2011.

Collins was already on her "last, last warning" after the blog allegations contained in the "Dirty Politics" book published by political journalist and activist Nicky Hager on Aug 13.

Key said he rang Collins this morning to discuss the email and had "understood the need to resign", although Collins "she strongly denies any suggestion of inappropriate behaviour on her part."

An independent inquiry will be established and Collins had expressed a desire to "clear her name" and would "actively cooperate", said Key of a Minister who until recent times had been seen as high-performing in her portfolios, politically ruthless and with ambitions to replace Key, which now appear very remote.

Key said he had told her not to expect a Cabinet post in a re-elected Key government, although if an inquiry found in her favour, the possibility of a return to Cabinet could not be ruled out.

“The relationship between a Minister and their Chief Executive is vital, and goes right to the heart of a trusted, effective government," said Key.

"She certainly has a different version of events," said Key. "But the seriousness of this will not escape anybody. This is the head of the SFO. This looks at least like a campaign that at least she was aware of that sought to undermine the head of the SFO. She would strongly argue that's not correct.

"There is another reading of those events. That's simply that those issues were passed on to the State Services Commissioiner, that's of course the appropriate place for any concerns that a Minister might have to deal with."

The email from Slater addressed to "Carrick" and "mark", whose surname has been excised, also claims he is "maintaining daily communications with Jared Savage at the Herald and he is passing information directly to me that the Herald can't run, and so are feeding me to run on the blog", while other information was arriving via the WhaleOil "tip-line" - a feature of Collins's relationship with Slater highlighted in Dirty Politics.

Carrick Graham, a public relations entrepreneur and son of former Justice Minister and chairman of the failed Lombard Finance group, Sir Douglas Graham, also features prominently in the book as a conduit of information to the Whaleoil blog intended either to have political impact or to back his corporate clients.

Around October 2011, Feeley was taking heat in the media for drinking a $70 bottle of champagne that had belonged to Bridgecorp, a failed finance company which was the subject of an SFO investigation that led to the jailing of two former directors, Rod Petricevic and Rob Roest.

The champagne was consumed at an SFO staff drinks session at Feeley's home to celebrate the conclusion of the Bridgecorp case.

The Herald's most senior business commentator, Fran O'Sullivan, wrote at the time that Collins was regarding Feeley's decision to celebrate the prosecutions "with plonk that came from the alleged fraudster's company" as a question of character and judgement, and had passed the matter to the SSC.

Slater said in the email he planned to try and interest a Fairfax journalist in the issue and that "Cathy" would be in touch with the National Business Review. Cathy Odgers, a close friend of Slater's who engages with New Zealand politics while living in Hong Kong as an international tax specialist, also features in Dirty Politics, which reproduces emails of a group plotting on various political fronts, including within the National Party, where the Whaleoil revelations have caused widespread alarm and distaste at the highest levels of the party.

Feeley announced his resignation from the SFO in July 2012 to become chief executive of the Queenstown Lakes District Council. Collins had initially touted Feeley as a new broom at the office, coinciding with the need for widespread finance company collapses ahead of and during the global financial crisis of 200/9.

In a statement, Collins said Statement from Honourable Judith Collins MP said she had "informed the Prime Minister that I am resigning as a Minister from Cabinet."

"I was not party to this email or discussion and have only today been made aware of it," she said of Slater's email.

“I absolutely and strongly deny this and any suggestion of inappropriate behaviour."


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